PC market enjoying the good times but shadows falling across 2020
Current market conditions are delivering strong growth but Canalys has warned that some of those factors will not last for much longer
The PC market continues to provide fertile ground for those resellers that like delivering hardware with the growth in Q3 reaching levels not seen for seven years.
The last time the global PC market saw a 4.7% climb and shipments breaking through 70m units was back in the first quarter of 2012 but the conditions on the commercial side of the market have been solid all year so it is perhaps not that surprising that Q3 delivered for the hardware channel.
An analysis of the market from Canalys showed that Lenovo was in pole position, followed by HP and Dell. The top five places were filled out with Apple and Acer.
But, and it's a rather big but, the analyst house has warned that the good times will not last and the current market factors are sustaining a short-term boost that could wear off as early as Q1 2020.
The end of Windows 7 support in January next year and the ongoing migration to Windows 10 is one of the current factors, along woth seasonal inventory stocking ahead of the key Q4 holiday season.
Some of the other factors that helped Q3 turn in such a strong performance are not likely to last long with the US and China trade war being one of the main reasons vendors on the other side of the Atlantic ramped up production orders and built up channel inventory ahead of the next round of tariffs, coming in mid December.
Europe was hit by the Brexit effect with the ongoing political uncertianty being blamed for customers showing caution about hardware investments. As a result shipments came in at 2% in EMEA for Q3, which was below the global average. Apple was the only vendor to see increases in the region.
“The PC market high is refreshing. However, there is a limit to how quickly leading vendors can ramp production,” said Rushabh Doshi, research director of Canalys’ mobility services. “Intel remains a key bottleneck, with pressure on its 14nm CPU supply not likely to see improvement until Q1 2020. However, the Intel CPU shortage provided leading PC vendors an advantage over smaller rivals drove HP and Lenovo to their best Q3 performance to-date."
"Going forward, leading vendors will have an opportunity to further consolidate the market and squeeze smaller vendors’ market share, if the Intel supply is not able to satisfy the spike in orders," he added.
At the same time research from Context showed that consumers were driving demand for another hardware category, premium monitors, with home office users, gamers and creatives some of the key buyers.
Sales of monitors across Western Europe through consumer channels, retail and etail, continued to grow and were up by 4% year-on-year in August.
“Historically, Q4 is the strongest quarter for consumer sales, particularly those of premium monitors”, said Dominika Koncewicz, senior analyst for displays at Context. “Therefore, we should see even more sales through consumer channels in the months leading up to the Christmas season.”